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Shaking Up the Drug Industry

Zachary Bentley says he's no Ralph Nader. The business manager and corporate officer of a drug infusion service, Ven-A-Care, based in Key West, Florida, is shaking up the pharmaceutical industry all the same.

It's true; Bentley never planned to lead a crusade for corporate reform. In 1990 he simply was sitting at his desk wading through paperwork when he noticed something amiss with a Medicare payment. He received a $56 reimbursement for a pharmaceutical that had cost his company only $10. In theory, 80 percent of the drug was to be paid for by Medicare and 20 percent by the beneficiary. Bentley did some quick math and figured that the beneficiary's co-payment alone surpassed the actual cost of the drug. Convinced that the Florida Medicare carrier had erred, he tore up the check and asked the agency to reprocess the reimbursement.

Days later, the carrier got back to him and informed him that there was no mistake. Puzzled, Bentley searched for answers. What he found shocked him. More than a few doctors and clinics are billing Medicare based on "wholesale" prices that pharmaceutical companies give the government program. The pharmaceutical companies then sell the drugs to the health care providers at a much lower cost. The providers reap exorbitant profits and, because the windfall operates like a government-funded kickback, pharmaceutical companies also come out big winners.

Bentley reported his discovery to federal and state agencies, yet was troubled by their muted response. He knew intimately the impact of skyrocketing drug costs on people suffering from debilitating illness. At the time, Ven-A-Care primarily delivered intravenous drug care to clients in their homes as an alternative to visiting a hospital. Most of its business was AIDS-related, and Ven-A-Care gained local acclaim for extending treatment to patients even after their health insurance ran out.

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